BEA Systems has been transitioning from its roots as maker of Tuxedo middleware transaction tools to developer of a full-fledged e-commerce platform during the past year. And that strategy appears to be paying off.
The San Jose-based company, buoyed by the rapid growth of the Internet, reported better-than-expected third-quarter earnings as a result of sales of its Web infrastructure tools, the WebLogic application server and its transaction platform.
BEA's stock soared $US9.25 to $81.75 last Wednesday, compared with a 52-week low last November of just $8.69.
"BEA has successfully moved the company from a provider of staid middleware solutions into a fully integrated provider of e-commerce solutions," wrote Michael E. Stanek, a financial analyst at Lehman Brothers, in a stock report.
On October 31, BEA reported income of $14.2 million on revenue of $126.5 million, a 56 per cent revenue increase from the same period a year ago. At that time, the company posted earnings of $7.6 million on revenue of $80.9 million.
Analysts attributed BEA's numbers a year ago to year 2000 concerns at large corporate information-technology shops that temporarily delayed Web developments.
"A year ago, this particular market, and across the industry, got taken down on Y2K concerns and saw spending shifting from middleware software to bug fixes," said J.C. Simbana, a research analyst at American Fronteer Financial in Denver.
"We were put in the penalty box a year ago and held in Y2K prison," said BEA Chairman and CEO Bill Coleman. "But meanwhile, e-commerce came along and threw the market into high gear."